In an interaction with Brahmani Nara said, “The company entered the western markets in the last few years and the northern markets recently. We have also seen an increase in the volume of our products being sold in western markets.”
Brief us about your business and the group as a whole.
Heritage foods Limited was incorporated on June 5, 1992. The company is principally engaged in the dairy. In the dairy division, the company is in the business of milk, milk products, and ice cream/frozen dessert. The company sells dairy products under Heritage, Alpenvie, Dairy Life, Dairy Pure brands. The Dairy division is the flagship business vertical for the company. The company has a direct procurement network of over 3 lakh dairy farmers across 8 major milk producing states namely Andhra Pradesh, Telangana, Karnataka, Tamil Nadu, Maharashtra, Rajasthan, Haryana and Punjab. The direct milk procurement from farmers enables the company to maintain high quality and efficient pricing. Heritage has mastered all these and has been successful in providing health and happiness to consumers in the last 27 years.
In the year 2018, Heritage Foods Ltd has completed the acquisition of dairy business of Reliance Retail Ltd which the company had announced during October 2016. Through this acquisition, the company made inroads for business in the Northern markets.
What are the Company's targets in the milk product space? What does the company envision in terms of revenue and profits in this segment?
The market size of dairy stands at about Rs6 lakh cr, out of which about 27% of the market is organized and has been growing at 10 to 15% p.a. The entry of large MNC dairy companies into the country and expansions announced by domestic dairy companies including Heritage shows that the demand for value-added dairy products (VADP) and milk is increasing steadily and that the pie of organized dairy is going to increase, besides a rise in the per capita consumption of milk.
Kindly shed light on product categories and best sellers. Going forward, what are your plans to expand the category range?
Nationally, five product groups contribute to 90% VADP revenues. They are 1. Packaged Milk 2. Butter Milk 3. Curd / Dahi, Drinkables (which includes Flavoured Milk and Lassi), 4. Dairy Fat (Butter, Ghee, Paneer, Peda, etc.) and 5. Ice creams & Frozen Dessert
The company has recently launched healthy variants in lassi such as Sabja lassi & they have been a hit with the customers.
Heritage has a presence in all of the above categories. While all these products are sizeable and growing, Curd/Dahi stands out as a category which is growing at the fastest rate. While Curd/ Dahi contributes sizeable part of the VADP for Heritage.
In the last 1-2 years, the company has grown its VADP portfolio, which contributes to 25% of the revenues. Besides this, the company has set up an Ultrahigh Temperature (UHT) milk processing plant near Visakhapatnam. The company launched premium ice cream brand Alpenvie and had ventured into the flavoured milk segment. We have integrated operations in the Northern markets and have set up a processing plant in Sonipat and at Khamanon near Chandigarh to cater to these markets.
What are your expansion plans going ahead? At last, kindly highlight your growth and future plans?
The company is aiming for better-than-industry growth rates during the next five years. We are pursuing the following growth initiatives currently:
- Setting up a greenfield yoghurt plant by 2019 through our JV company
- Increasing the contribution of the value-added products segment from 25% to 40%
- Expanding the presence of the brand in relatively newer geographies like Northern and Western to achieve sizable business
- Working on expanding both organic and inorganic processing capacities and also in areas of procurement of milk
Can you brief us about your CSR activities?
As a company, we are dedicated to constantly boost our social responsibilities to make a significant change in the lives of others by aligning our initiatives to achieve goals. In our focus on business and care for community, the company has recognized that the only way ahead for us as a nation is by giving back. Few CSR activities that we undertook are as below:
- Initiative with an NGO CHORD
- Rebuilding cyclone-affected lives
- Helping Kerala stand up after the floods
- Uplifting women through education